Thursday, October 20, 2011

Patrick Byrne Fails to Celebrate Deep Capture Libel Suit

Byrne: About to learn a lesson in Canadian libel law.

For years I've been following the exploits of the publicity-hungry CEO of Overstock.com, Patrick Byrne, famous for blaming his company's failing fortunes on a "Sith Lord," and for setting up an astroturf website, called Deep Capture, to libel and harass his critics, myself included.

Given Byrne's propensity for self-promotion--with this far-right Milton Friedman fan toting a camera crew to Liberty Plaza to glom on to the Occupy Wall Street movement--I was surprised that he failed to issue a gloating press release to celebrate a libel suit that has been brought against Byrne, Deep Capture and Mark Mitchell, the disgraced former Columbia Journalism Review editor who now works for Byrne.

The suit, brought in Vancouver, Canada, was filed by one of the dozens of victims of Byrne's libel machine, a stock promoter by the name of Altaf Nazerali who was the subject of lurid accusations by Byrne minions on the Deep Capture website.

Byrne, who once "celebrated" one of his many SEC subpoenas, has been uncharacteristically silent, though a hysterical post on the Deep Capture site a few weeks back indicated that he had been contacted about the impending suit. Whether his lawyers will continue to keep his trap shut is anyone's guess.

According to an item that appeared today on Canada's Stockwatch, "Nazerali claims that the site portrays him as a criminal and a fraud artist, among other things. The site linked him with an Osama bin Laden associate and with members of the Mafia."

Among the defendants, according to Stockwatch, are Mitchell, Byrne, Deep Capture LLC -- the corporate shell Byrne created to house his astroturf site -- and High Plains Investments LLC. Since High Plains, a hedge fund wholly owned by Byrne, is considered a related company to Overstock.com, this raises the question of whether Byrne is obliged to disclose it in the company's filings.

Whatever. I only know this much: Canada's libel laws are similar to Britain's, in that they are heavily pro-plaintiff. Byrne had apparently gotten used to libeling low-income journalists in the U.S. He stepped out of his league when he went after a well-heeled business exec in Canada who lacks most journalists' qualms (and lack of resources) when it comes to filing libel suits.

That's the problem with bullies, I guess. Sometimes they pick on the wrong victim.

I hope, for his sake, that Byrne's trust fund is alive and well, and that big daddy's money is continuing to flow into his account. Defending libel suits is a costly proposition, easily running into the millions, and I have a funny feeling Byrne hasn't got libel insurance. I also believe (though don't hold me to it) that under Canadian libel law, the loser has to pay the winner's legal fees. Stay tuned.

UPDATE: Mark Mitchell responds in the comments section, and I sur-respond.

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About Me

I'm a journalist and author. My latest book is AYN RAND NATION: The Hidden Struggle for America's Soul (St. Martin's Press: Feb. 28, 2012). My previous books were Wall Street Versus America (Portfolio: 2006) and Born to Steal (Warner Books: 2003). I was an investigative reporter and Wall Street writer for BusinessWeek, a contributing editor at Condé Nast Portfolio, and have written for the Daily Beast, Parade magazine, Salon, The Street.com, Fortune.com, Barron's and many other publications. I was an adjunct professor at Columbia University's School of Journalism. Follow me on Twitter @gary_weiss